Blackstone Group
BX 2.20%
LP, the world’s largest private-equity firm, beat Wall Street’s fourth-quarter earnings expectations, notching several full-year records for profitability and size that further distanced the New York firm from its closest competitors.

Blackstone said Thursday that it set all-time highs in 2014 in fundraising, cash invested, payouts out to investors in its funds, assets under management, the portion of profits available to share with stockholders as well as economic net income, an industry metric that includes unrealized gains as well as cash earnings.

Said Blackstone President Hamilton “Tony” James, “2014 was a record in just about everything for us.”

Blackstone continues to separate from the pack,” said Michael Kim, an analyst with Sandler O’Neill + Partners LP.

Despite the superlatives scattered throughout Blackstone’s results, the firm reported some fourth-quarter declines as it came up against a selloff in credit markets, lower values of energy holdings and a lucrative year-earlier period in its real-estate segment that Blackstone didn’t match.

Blackstone said fourth-quarter profit of $551 million, or 90 cents a share, was 11% lower than a year earlier. Economic net income was $1.45 billion, or $1.25 a share, down from $1.54 billion a year earlier but above the 92 cents forecast by analysts polled by Thomson Reuters.

Although Blackstone’s diversification into credit, hedge funds and real estate has at times helped protect its results against lulls at its older takeover-driven segments, the firm’s private-equity business and its soon-to-be-spun-out financial-advisory unit shone brighter, reporting economic-net-income gains of 95% and 72%, respectively, for the quarter. Meanwhile, economic net income fell at the credit and real-estate segments, by 57% and 38%, respectively.

A flood of deal profits and fees charged on the $290 billion mountain of money Blackstone manages enabled it to pay its richest dividend to date, both for a quarter and full year. The $2.12 per-share payout for 2014 translates to a haul in the neighborhood of $500 million for
Stephen Schwarzman,
Blackstone’s co-founder and chief executive, who owns roughly 22% of the firm’s shares.

Shareholders weren’t the only ones to reap the benefits, however; Blackstone said it paid out $45 billion to investors in its funds in 2014.

The record dividend—the firm met its previous high mark after three quarters—helped propel Blackstone shares 8.2% last year against declines that ranged from 5.9% to 27% for its publicly traded competitors, such as KKR & Co. and
Apollo Global Management
LLC.

Blackstone shares have continued to tick higher this year, closing up 0.33%, or 12 cents, at $36.86 on Thursday, the latest in a series of all-time-high closes reached this week after years of trading well below the firm’s 2007 initial-public-offering price of $31.

Increasingly larger dividends and the stock’s recent rise have helped push Blackstone’s total shareholder returns to 60% since the firm’s first trading day in 2007 through Thursday. The S&P 500’s total return is 58.6% over the same period.

Fee revenue rose 10% to $716 million in the quarter and 13% for the year to $2.7 billion.

Blackstone’s share of fourth-quarter deal proceeds, or performance fees, was $1.32 billion, down from $1.69 billion a year earlier. For the year, Blackstone’s slice of deal gains totaled $4.4 billion, up 23% from 2013.

After those sales, Blackstone holds $14.1 billion of stock in its private-equity funds, which portends a steady stream of deal profits to come. The firm invested $26 billion in 2014, putting a record amount of cash to work despite the relative scarcity of the multibillion-dollar public-to-private buyouts on which Blackstone and its rivals made their names orchestrating.

“Looking forward, we see continued momentum across all of our businesses as the environment for both investing opportunistically and harvesting more seasoned assets remains attractive,” Mr. Schwarzman said.

Blackstone reported assets under management of $290 billion, up from $266 billion a year earlier as each of the firm’s four segments that manage money bulked up.

Blackstone’s closest competitor by assets,
Carlyle Group
LP, said it managed about $203 billion as of Sept. 30. The Washington, D.C., firm is scheduled to report fourth-quarter results on Feb. 11. None of Blackstone’s other competitors manage more than $200 billion, as of the end of September.